Acadia shares fall on failed Parkinson's study

NEW YORK 
Shares of Acadia Pharmaceuticals Inc. plunged Tuesday after the company said its drug candidate pimavanserin failed to meet key treatment goals in a late-stage study focusing on patients with Parkinson's disease psychosis.

The San Diego-based company's stock tumbled $3.97, or 68 percent, to $1.87 in midday trading. Shares have traded between 72 cents and $6.60 over the last 52 weeks.

"While we obviously are disappointed with the results of this Phase III study, we continue to believe in the potential of pimavanserin based on our clinical experience to date," said Acadia CEO Uli Hacksell, in a statement. "We will thoroughly analyze these data along with the data on other secondary and exploratory endpoints over the next month to better understand the outcome of this study."

The drug candidate did not meet the study's standard of anti-psychotic effectiveness. Symptoms associated with Parkinson's disease psychosis include visual hallucinations and delusions. Hacksell said the company is continuing a second late-stage study on the drug candidate.

The company cited statistics saying about 40 percent of the $1.5 million Americans with Parkinson's disease suffer psychosis. There is no therapy in the United States approved to treat Parkinson's disease psychosis.

Citi analyst Dr. Lucy Lu downgraded shares of Acadia to "Sell" from "Hold" and reduced her price target to $1.50 from $4.50, citing the study failure. She said slashed 2011 revenue estimates to $8.4 million from $23.3 million and 2012 estimates to $7.6 million from $46.3 million.